South Korean Bank Chief Apparently Kills Himself, Police Say

Choe Sang-Hun

Saturday, 24 Sep 2011 | 12:55 AM ETThe New York Times

SHARES

The head of a South Korean savings bank appeared to have jumped to his death on Friday, police officials said, as prosecutors expanded their investigation into an alleged corruption scandal by raiding his and six other banks and seeking to arrest a former senior aide to President Lee Myung-bak.

Jeong Gu-Haeng, president of Jeil 2 Savings Bank, was found dead after apparently jumping from his office on the sixth floor of the bank’s headquarters in downtown Seoul, a police spokesman said, insisting on anonymity until his agency made an official announcement. People who were entering the bank witnessed Mr. Jeong falling, the spokesman said.

“He apparently jumped from his office,” he said. “It looks like a suicide.”

The man jumped as prosecutors, police and bank regulators raided seven savings banks, including Jeil. They were searching for evidence of alleged irregularities by their executives and major shareholders, such as excessive loan extensions and bribery.

Last Sunday, financial regulators suspended the operation of the seven banks for six months, citing their poor financial condition. So far this year, they have suspended 16 savings banks after their investments in real-estate developments and other misbehavior damaged their liquidity.

Savings banks account for a tiny portion of the country’s financial industry, and the trouble at some of them has had little impact on the financial stability of the country. But it angered many depositors and threatened to damage President Lee’s image.

On Friday, prosecutors said they were seeking to arrest Kim Du-woo, a former presidential aide for public relations on charges of accepting an expensive golf set and other bribes from a lobbyist for a savings bank whose operation was suspended early this year.

The lobbyist for Busan Savings Bank, Park Tae-kyu, was arrested in late August on charges of bribing government officials and politicians last year to try to avoid the suspension of the bank. Prosecutors also accused the bank’s executives of embezzlement and fraud.

Mr. Kim, while quitting as Mr. Lee’s aide last week, denied the charges. He has since been questioned by prosecutors.

Nearly all of Mr. Lee’s predecessors’ reputations had been tarnished toward the end of their terms by corruption scandals involving their family members, aides or senior government officials.

This week, a former head of a bankrupt shipyard told reporters at a news conference that he had regularly given cash to two other close confidants of Mr. Lee. The political opposition demanded that prosecutors investigate the case, while the former officials denied the allegations.

On Friday, prosecutors said they were questioning the businessman, Lee Kook-chul, before deciding whether to question the former officials.